Apple Inc. (NASDAQ:AAPL) doesn’t need an “iPhone Mini” to beat out smartphone competitors. Sure, Google Inc (NASDAQ:GOOG)‘s Android commanded the mobile OS market while manufacturers bolstered the Android platform in 2012, but quantitatively focused investors are neglecting one very important facet about the Chinese consumer that could push Apple Inc. (NASDAQ:AAPL)’s stock higher — whether there’s an iPhone Mini or not.
Android is pushing Apple out worldwide
Any way you look at it, smartphone numbers spell trouble for Apple Inc. (NASDAQ:AAPL). Last year, Android captured up to 34% of the total phone shipments, while iOS phones accounted for only 11% of an aggregate 438.1 million mobile phones last quarter, according to a Canalys report. Within the smartphone market, Android dominated with 69% or 216.5 million of the shipped smartphones.
Once you dig deeper into the Android numbers, the picture gets worse: Apple Inc. (NASDAQ:AAPL) seems to face a full frontal assault from pretty much every single smartphone manufacturer.
While Apple sold a respectable 101 million smartphones last year, that’s still 74 million less than No.1 Samsung. More shockingly, the South Korean company grew at a staggering 78% last quarter alone — handily leaving Apple Inc. (NASDAQ:AAPL) in the dust. And Samsung is only the start of the story.
In the past month, there’s been speculation that No. 3 manufacturer Nokia Corporation (ADR) (NYSE:NOK) — which shipped 35 million units — might launch an Android phone. Although the company previously said it would only develop for Windows Phone, the competition and stakes seem too high for the company to not diversify. In all probability, an Android phone is imminent — and all the more reason why the media thinks Apple’s software and hardware market share are about to plummet.
Apple’s biggest threat: Cheap Chinese phones
What may really push Apple to release a low-cost iPhone may be competition from China, where Android commands 80% of the smartphone mobile OS market.
Due to Chinese demand, Huawei, ZTE, and Lenovo each grew by triple digits to take the No. 3, No. 4, and No. 5 spots, respectively, for the fourth quarter of 2012. Now, no one would dare say that any of these companies can build iPhone-quality phones, but these companies’ portfolio of low-cost Android smartphones have helped them zoom past Sony Corporation (ADR) (NYSE:SNE). That’s the first time Sony has ever dropped out of top-five rankings, and seemingly left to die in the smartphone arena!
As these Chinese companies continue to build on and broaden beyond their low-cost phone portfolio, they may soon become another “Apple-killer” like Samsung.
Don’t believe me?
Just look at Lenovo. The company can obviously build great products, like its ThinkPad laptops. And Lenovo can do it again. True, they may need to acquire Research In Motion Ltd (NASDAQ:BBRY) BlackBerry, but, if they do, they could boost their hardware capabilities to take on Apple.
As domestic manufacturers seem to have the Chinese market locked down and looking to expand abroad — coupled with Samsung’s dominance — it’s understandable that Apple investors would hope for a low-cost iPhone. By offering a cheaper, entry-level model, Apple could use the iPhone Mini as a way to lock in customers to its product and app ecosystem then upsell them later.